Urbanists warn of increase in prices

THE NEW fee paid by developers which municipalities should use to cultivate the environment may increase the prices of new flats by thousands of euros.

Illustrative stock photoIllustrative stock photo (Source: SME)

The urbanists associated in the Institute of Urban Development (IUR) civic association have warned that the draft, authored by Smer MPs Igor Choma (Žilina mayor) and Richard Raši (Košice mayor) which is currently being discussed in the parliament, has several flaws. One of them is a high development fee, amounting to €10-45 per square metre of above-ground floor area.

“If they used the maximum tariff, the price of flats would increase by €3,000-7,000, depending on the size,” IUR executive director Juraj Suchánek said, as quoted by the Sme daily.

Moreover, the proposed sum is not supported by any surveys.

“The preparation of such a complicated law, which will have nationwide effectiveness, was weak,” said IUR deputy chair Drahan Petrovič, who has experiences with introduction of a similar fee in Vancouver, Canada, as quoted by the SITA newswire.

Also other analysts have warned of an increase in prices of flats. INEKO think tank head Peter Goliaš told Sme that developers may transfer part of their costs to consumers. The exact amount will depend on the demand, he added.

Except for a high fee, the municipalities may impose it on various lands, even smaller areas. This may cause that while the developer will have to pay for one building, others will not have to pay for similar size construction located elsewhere. This may discriminate against construction projects and boost corruption, the urbanists warned, as reported by SITA.

Moreover, the draft law does not say how the fee should be used. This duty, which was part of the original proposal, was omitted from the current version, Suchánek said. The law also does not oblige municipalities to send the money to a separate account which would allow better control of its use.

“It is necessary to re-write the law, otherwise it will result in increasing real estate prices, from which only the end consumer will suffer,” IUR members claimed, as quoted by SITA.

Choma told Sme he is ready to discuss possible changes. The critics know where to turn if they want to negotiate, he added.

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